Pantiles Investments Ltd ((in Liquidation)) v Sabine Christel Karina Winckler
| Jurisdiction | England & Wales |
| Judge | Mullen |
| Judgment Date | 23 May 2019 |
| Neutral Citation | [2019] EWHC 1298 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CR-2015-007093 |
| Date | 23 May 2019 |
[2019] EWHC 1298 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
Rolls Building
Royal Courts of Justice
7 Rolls Buildings
London EC4A 1NL
INSOLVENCY AND COMPANIES COURT JUDGE Mullen
Case No: CR-2015-007093
In the Matter of Pantiles Investments Limited (In Liquidation)
And in the Matter of the Insolvency Act 1986
Mr Joseph Curl (instructed by Devonshires Solicitors LLP) for the Applicants
Mr Oliver Ingham (instructed by FidLaw LLP) for the Respondent
Hearing dates: 19 th to 20 th March 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
INSOLVENCY AND COMPANIES COURT JUDGE Mullen
ICC JUDGE
Introduction
This application is brought by Mr James Dowers, the liquidator of Pantiles Investments Limited (‘Pantiles’ or ‘the Company’), against its former director, Ms Sabine Winckler.
Pantiles was incorporated on 14 th October 2009 and its sole de jure director and shareholder was at all times Ms Winckler. It did not engage in any activity until it purchased a property known as 656 Finchley Road, London NW11 6XX (‘the Property’) from Ms Winckler's long-standing friend and sometime employer, Mr Peter Goldbart. The Company was incorporated for the specific purpose of purchasing the Property. The Property was transferred to the Company on 15 th February 2011 for the price of £550,000, apparently with a further payment of £50,000 being made for fixtures and fittings to Mr Goldbart's wife, Ms Reiko Iwamoto.
Ms Winckler did not contribute any monies to the purchase, and nor did Pantiles have any monies of its own. The monies to effect the purchase are said to have been provided by way of loans to it as follows –
i) BM Samuels Finance Group PLC (‘BM Samuels’) provided a loan of £345,000 on 15 th February 2011, which loan was secured by a fixed charge over the Property and floating charges over the Company's assets.
ii) Goldbeck Investments (2009) Limited (‘Goldbeck (2009)’) is said to have made an unsecured loan of £270,000 on 15 th February 2011. Ms Iwamoto was the director of Goldbeck (2009) and she and her son were the shareholders of Lynwood Property Investments Limited (‘Lynwood’), which in turn held the entire issued share capital of Goldbeck (2009). These monies came from the sale of 4 Chandos Way, a property owned by Goldbeck Investments Limited (a separate company from Goldbeck (2009)).
iii) Mr Peter Steckelmacher made a loan of £70,000 in December 2010, which loan was repaid on 1 st March 2011 from the proceeds of sale of another property in which Mr Goldbart was interested.
Mr Steckelmacher made a further advance pursuant to a deed dated 10 th December 2011 (‘the Second Stecklemacher Loan’). The deed was executed by Mr Steckelmacher as lender, the Company as borrower and Reiko Iwamoto as ‘second borrower’. Under the terms of this deed. Mr Steckelmacher agreed to lend £70,000 to Pantiles for the purpose of assisting Ms Iwamoto ‘to partially finance the purchase of 68, Abercorn Road, London, NW7 1JT’. The monies were paid to Ms Iwamoto, not the Company.
Mr Goldbart and Ms Iwamoto did not move out of the Property but entered into a tenancy agreement with Pantiles on or about 17 th December 2010. Mr Goldbart was adjudged bankrupt on 5 th October 2011 on a creditor's petition presented on 8 th July 2011. On 5 th January 2012, Mr Stephen Hunt of Griffins, a firm of insolvency practitioners, was appointed as his trustee in bankruptcy. Mr Peter Murray and Mr Andrew Foster of Griffins interviewed Ms Winckler on 31 st May 2012 in connection with Mr Goldbart's bankruptcy.
The Property was then sold by the Company to a third party. Completion took place on 12 th June 2012 for £899,000. The proceeds were paid away as follows:
i) £21,252 was paid to Moreland UK, the estate agents acting on the sale;
ii) £6,080 was used to discharge the costs of Segens Blount Petre (‘Segens’), the solicitors acting for the Company on the sale;
iii) £364,541.63 was paid to BM Samuels to discharge its secured loan;
iv) £75,307.50 was paid to Newman Law, the solicitors for Mr Steckelmacher, to discharge his secured loan of 10 th December 2011;
v) £250,000 was paid to Mr Hunt as Mr Goldbart's trustee in bankruptcy in settlement of his claim that the transfer to the Company by Mr Goldbart in February 2011 had been at an undervalue; and
vi) the balance of £181,818.51 was paid to Goldbeck (2009).
Following the settlement of Mr Hunt's transaction at an undervalue claim, he came into possession of a letter from Mr Goldbart to Suzette Newman of Newman Law, dated 9 th February 2010. Mr Goldbart referred to an opinion of Mr Joshua Swirsky of counsel and said:
‘The actual proposed transaction is as follows:-
1. Peter has set up Pantiles Investments Ltd the sole shareholder and director is Sabine Winckler.
2. Sabine Winckler has executed a declaration of trust confirming that she holds the shares in Pantiles Investments Ltd as “bare trustee” for Peter.
3. What is omitted from Joshua's opinion is the fact that Pantiles Investments Ltd will also enter into a declaration of trust that it holds its interest in 656 Finchley Road, as “bare trustee” for Peter The significance of this is that at no time does the actual beneficial interest in 656 Finchley Road actual [ sic] depart from Peter.
4. For commercial reasons in order to discharge the debt to Royal Bank of Scotland new funding has to be put in place.’
He went on to say that leases would be put in place for three or four years and the Property would then be sold when Mr Goldbart reached the age of 70. He said that he was trying to arrange finance to complete the purchase of the Property which would enable him to force the mortgagee of the Property to ‘back off’. He concluded that he was not going to give up his home ‘without putting up a fairly substantial fight’ and that he would need to consider the implications of his ‘impending bankruptcy’.
Mr Goldbart contended that this letter refers only to a scheme to mitigate stamp duty but, on the basis of it, Mr Hunt formed the view that the sale of the Property to the Company, and the subsequent sale and distribution of the proceeds of sale by the Company, were part of a scheme to defraud Mr Goldbart's creditors. He consequentially sought disclosure from Segens of information as to the destination of the sale proceeds. In due course he commenced a claim seeking, amongst other things, a declaration that the shares in Pantiles were held on trust for Mr Goldbart and thus for him as Mr Goldbart's trustee. Mr George Bompas QC, sitting as a deputy High Court Judge, made such a declaration on 4 th February 2016. He similarly concluded that Lynwood was a nominee for Mr Goldbart.
Pantiles was wound up on 3 rd August 2015 on the petition of HM Revenue and Customs. Mr Dowers was appointed as liquidator of the Company on 22 nd October 2015. Mr Dowers interviewed Ms Winckler as to the circumstances of Pantiles on 15 th December 2015.
Mr Dowers issued an application in this court on 18 th May 2018 by which he brings two claims against Ms Winckler –
i) The first is a claim for fraudulent trading under section 213 of the Insolvency Act 1986 (‘the 1986 Act’) on the basis that Ms Winckler was knowingly a party to the carrying on of the business of the Company with intent to defraud the creditors of Mr Goldbart. He seeks a declaration that Ms Winckler is liable to make a contribution to the assets of the Company in a sum equal to the deficiency to creditors and an order that she makes such a contribution.
ii) Secondly, pursuant to section 212 of the 1986 Act, he claims that Ms Winckler was in breach of her duties as director and guilty of misfeasance by allowing the business and day-to-day operation of the Company to be run or controlled by Mr Goldbart at a time when he was an undischarged bankrupt.
iii) Further, again pursuant to section 212 of the 1986 Act, he claims that Ms Winckler was in fraudulent breach of trust, breach of her duties as director and was guilty of misfeasance in causing or allowing the Company:
a) to pay away the sum of £181,818.51 to Goldbeck (2009);
b) to enter into a second charge on the Property in or around January 2012 to secure the loan from Mr Steckelmacher, when the sole beneficiary of that loan was Ms Iwamoto; and
c) to repay in full the said loan from the proceeds of sale of the Property in the sum of £75,307.50 without first seeking repayment by, or an indemnity from, Ms Iwamoto.
He claims declarations under section 212 and an order that Ms Winckler pay equitable compensation to the Company. He further claims compound interest on any sums that the court orders Ms Winckler to pay. It is common ground that, were I to conclude that Ms Winckler is liable under either section, a further hearing would be necessary to consider what the appropriate relief should be.
In summary, Mr Dowers' case is that Ms Winckler was a knowing front for Mr Goldbart, who was the real controlling mind behind the Company. He says that there is no evidence that Goldbeck (2009) made any payment towards the purchase of the Property. His primary case is that the repayment of this loan, and the repayment of the Second Steckelmacher Loan, were no more than devices to cause the sale proceeds of sale to be paid to Mr Goldbart's associates for his benefit. In entering into the Second Steckelmacher Loan she caused the Company to enter into a transaction that created a liability and conferred no benefit upon it. In paying the monies said to be due to Goldbeck (2009), she left the Company without...
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